Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

Table of contents
Executive Summery
1. Introduction
2. Industry Analysis
2.1 Current Industry Trends
2.2 Organizational Chart
2.3 SWOT Analysis
2.4 Porters Five Forces
3. Strategic Formulation and Implementation
3.1 Porters Generic strategies
3.2 E-Business Strategy
4. Conclusion
References

Executive summary
This report aims to present an analysis of business strategies for the success of
operation of a new restaurant, MyHome Hotpot, a Chinese hotpot buffet. By
implementing a SWOT analysis as well as considering Porters five forces it is
evident that such a business will undoubtedly work well in the area due to the current
market trends and the type of consumer the business aims to target.

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

Introduction
Haymarket is a thriving area, both with a large population of business workers and
students from UTS. This report will analyse the successful start-up of a new
business on level 10 of 178 Thomas Street, Sydney. MyHome Hotpot is a Chinese
Hotpot Buffet restaurant that aims to appeal to customers by offering a new dining
experience with a strong focus on providing good quality and a competitive price to
combat competition in the area. In this report current industry trends will be
discussed and a SWOT analysis will be performed. Porters five forces will be
applied to the feasibility study and an overall strategic formulation and
implementation of the business will be presented.

Industry Analysis
Current Industry Trends
Due to increasingly busy lifestyles more and more consumers are turning towards
eating out rather than cooking at home. Thus the restaurant industry has been
steadily growing in the past few years. According to IBIS World (2015) the industry is
expected to gain a 2.0% growth rate between 2015 and 2016. That is a $12.0 billion
increase in revenue over 5 years or 4.3% between 2011 and 2016 (IBIS World,
2015).
A momentum in health conscious consumers has driven a need for healthier food
options with many rejecting fast food outlets. As such completion is quite strong in
the industry as fast food outlets are beginning to capitalise on this trend by providing
healthier menus (Browne, Han, 2015). The main performance drivers in the industry
include real household discretionary income, real hours worked, Consumer

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

sentiment index and a demand for fast healthy meal options. Due to an increase in
average household income as well as a longer working week many consumers are
choosing faster, convenient options for lunch and dinner. Between 2009 and 2012
disposable household income for low income households increased by 5% and 4%
for middle income households. (ABS, 2013). IBIS World (2015) considers the
restaurant industry in its mature stage and the industries contribution to the economy
to be 2.8% between 2020 and 2021 align with actualised GDP growth.
Organizational Chart
MyHome Hotpot will have a fairly small initial structure however with increases in
revenue the amount of staff will grow. Below is the organisational Chart which
include all key staff and positions essential to smooth operation of the business.
Apart from the owner the restaurant will require a general manager who will oversee
an experienced head chef and the front house manager who respectively will
manage the servers and apprentice chefs.

Owner

General
Manager
Front
House
manager

Head
Chef

Lead
server

apprentic
e chef
host
dishwash
er

server

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

SWOT Analysis
A SWOT analysis is a fundamental analytical tool for identifying and categorising
internal and external factors that affect businesses. Internal factors such as strengths
and weaknesses help organisation to identify aspects of operations that are in their
control. (Fine, 2009) By combating weaknesses and focusing on strengths an
organisation can significantly improve revenue and success. External factors on the
other hand are not in the organisations control. However by identifying opportunities
and threats an organisation can prepare itself to handle unexpected changes in
industry and consumer spending. MyHome Hotpot has the following strengths,
weaknesses, threats and opportunities.
STRENGTHS
Provide healthy food options
Comfortable atmosphere for leisurely
dinning
Central location surrounded by a
distinct business district and universities
High focus on quality and customer
satisfaction to ensure a loyal customer
base
Few Chinese Hotpot restaurants in the
area mainly Japanese and Korean
dining or Chinese buffets which offer
unhealthier fast food options.
Located close to Sydney fish market
ensuring high quality and fresh product
availability
OPPORTUNITIES
Can appeal to international students
from Asia by providing more authentic,
traditional cuisine
By providing a larger selection of menu
options it is possible to appeal to
westerners who may be afraid to try
new food
Providing specials advertised on the
website, since online has greater traffic
flows it is possible to encourage more
consumers
Offering high quality food and utilising

WEAKNESSES
Strong dependence on economic
activity and household disposable
income
Located in Haymarket area where there
is a large number of Asian cuisine
options
New small business without name
impact in industry
Located on top floor of high-rise building
not in direct view of passing public.

THREATS
MyHome Hotpots threat includes
changes within and outside the area of
operations such as economic changes,
varying customer preferences, changing
lifestyles, and other relevant factors
such as disposable income.
Stiff completion within the area is
always present with many new
restaurant opening
Fast food outlets are beginning to offer
healthier menu options
Possible increase in rent and food

Individual report MYHome Hotpot

other restaurant review websites such
as yelp, Zomato, Eatability and etc. can
also achieve the above.

Tatiana Boukhantsova
SID: 2815047
products can affect costs

Porters Five Forces

Named after Micheal E. porter, the following analysis identifies five competitive
forces that help to shape the food service industry.
Suppliers Power
Although a number of local suppliers provide raw materials to restaurants in the
area, MyHome Hotpots supplier power is relatively low as it is a new business.
However restaurant in the industry are the primary source of revenues for raw food
suppliers making competition among suppliers more rigid and therefor more
affordable. If raw material become expensive due to climate and seasonal crop
variations, business in the industry would to have a hard time using a different type
of raw material to produce specific menu items. Therefor the quality and cost of raw
produce has a significant impact on the quality and price charged to consumers.
However since raw produce between suppliers is essentially interchangeable and
indistinguishable it is easier to build a loyalty based supplier buyer relationship to
secure quality raw materials at a reasonable cost.
Buyer Power
The buyer power of MyHome Hotpot is relatively low as it is a single entity restaurant
with only one location.

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

Industry Competition
Since the products sold by the industry have high storage costs or are perishable
there are many different and unique company strategies and due to fast market
growth

many

competitors

are

immerging.

Because

products

offered

are

interchangeable consumers cost to switch brands are low. Thus providing high
quality and unique menu items is essential to secure customer loyalty.
Threats to New Entrants/Barriers to Entry
Economies of scale play a major role in the cost of produce. Established competitor
in the industry have low fixed costs due to secured supplier relationships (Yamina,
Gunasekaranb, Mavondo, 1999), spend relatively little on plant and equipment and
are unlikely to cut price to defend their market position due to already established
customer loyalty. Therefor in the food service industry patents, proprietary
knowledge, and brand reputation are a considerable barriers to entry.
Threat of Substitute Products
Substitute products such as Korean hotpot and Japanese Udon and Ramen houses
are available in the area and are generally priced attractively. This ensures high
completion. However the quality, features and benefits of substitute products are
generally lower and priced higher depending on popularity of the venue.

Strategic Formulation and Implementation

Porters Generic strategies
Porter identified a successful business strategy as one that considered the strategic
scope, namely the market the business wished to enter, and the strategic strength of

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

the business, specifically the supply side dimension of the business as to what the
organisation could offer in terms of product differentiation and cost (Eldring, 2009)
According to Porter (1980) combining multiple strategies is successful only when a
market segmentation strategy is used alongside a product differentiation strategy.
This is effective when uniting an organizations product strategy to the characteristics
of a specific target market.
MyHome Hotpot aims to provide a unique experience by specializing in a specific
type of food product with smaller menu options to appeal to a niche market want,
namely healthy, hearty and quality food. By focusing on high quality and healthy
Hotpot soups that are fast too cook and consume the organization will be successful
in securing working professional in the area who are willing to spend more for quality.
However when combining this with a competitive price for the particular area the
business is based in, MyHome Hotpot will undoubtedly draw in the student
population of both, UTS, Notre Dame, Sydney TAFE and other surrounding
institutions. It also should be noted that according to the study conducted by
Taeyoung Yoo (2015) Chinese cuisine performs favorably in overseas markets
compared to Korean.
E-Business Strategy
To be successful in digital age it essential for a business to have an online presents
as many consumers turn to website and review apps to decide on lunch and dinner
options (Pearce, Robinson, 2011). MyHome Hotpot will invest in producing an official
website for the restaurant as well as ensure to place advertisements and encourage
reviews on applications such as Yelp, Eatability and TrueLocal.

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

Conclusion
In general, MyHome Hotpot is a sound investment as it have a number of
differentiating strategies implemented, namely strong focus on appealing to health
conscientious consumers and quality. The unique strength of a Chinese hotpot buffet
is its ability to provide more selective menu items Korean Hotpot restaurants cannot.
For example, fresh and economic seafood, traditional Chinese dishes and dim sum.
By analysing the market it is evident consumers are more focused on quality over
prices in line with the raising real household income. This in turn is the businesss
main strength, due to its proximity to the Sydney fish market and paddys fresh food
market.

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

References
ABS (2013) ABS: Main Features 2011-2012, ABS
URL: <http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6523.0Main+Features22011-12>
Last Viewed: 13 August, 2015

IBISWorld, (2015), Restaurants in Australia July 2015, IBISWorld Pty Ltd

Pearce, Robinson, (2011), STRATEGIC MANAGEMENT: Formulation,

implementation & Control, 12th revised edition, Mcgraw Hill Higher Education

Eldring, Jan, (2009), Porter s (1980) Generic Strategies, Performance and Risk: An
Empirical Investigation with German Data, Diplomica Verlag

S. Yamina, A. Gunasekaranb, T. Mavondo, (August 1999) Relationship between

generic strategies, competitive advantage and organizational performance: an
empirical analysis, Technovation Volume 19, Issue 8, Pages 507518

Fine, Lawrence G, (2009), The SWOT Analysis: Using your Strength to overcome
Weaknesses, Using Opportunities to overcome Threats 1st Edition, CreateSpace
Independent Publishing Platform

T. Mohammad, S. Barker, J. Kandampully, (2005) Multicultural Student

Perceptions of Fast Food Restaurant Brands: An Australian Study, Journal of
Hospitality & Leisure Marketing Volume 12, e 4, 2005, pages 93-117

Individual report MYHome Hotpot

Tatiana Boukhantsova
SID: 2815047

Yoo, Taeyoung (2015) Country of Origin and Diners Perceptions of A Cuisine The
Moderating Effects of Culinary and Institutional Factors, Journal of Hospitality &
Tourism Research January 6, 2015

R. Browne, E. Han, (2015) Fast food evolution - global super-brands are having to
reinvent themselves to keep up,SMH, Published: January 11, 2015
URL: < http://www.smh.com.au/nsw/fast-food-evolution--global-superbrands-arehaving-to-reinvent-themselves-to-keep-up-20150109-12j7mc.html>
Last Viewed: 10 August 2015